Canara HSBC Life fined Rs 1 crore by IRDAI for mis-selling policy

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs 1 crore on Canara HSBC Life Insurance Company Limited for mis-selling a deferred annuity policy to an 88-year-old customer. The regulator initiated proceedings after taking notice of a social media post regarding the sale.

Investigations revealed that the policy violated product guidelines, which restricted entry to individuals between 30 and 80 years of age. The sale, conducted through the insurer’s corporate agent Canara Bank, involved an annual premium of Rs 2 lakh for four years. IRDAI identified several systemic failures, including inadequate suitability assessments, deficiencies in verification calls, and a failure to disclose key policy features or the implications of the proposer’s death during the premium-paying period.

Following regulatory intervention, Canara HSBC Life refunded the full premium of Rs 4.09 lakh and reversed associated sales commissions. The company has since updated its product documentation and suitability frameworks and implemented pre-issuance video validation calls.